Baku, Azerbaijan, March 31
By Elena Kosolapova - Trend:
The Kazakh oil company Ozenmunaigas JSC has sent an application to the ministry of economy of Kazakhstan requesting the Uzen and Karamandybas fields be included on the list of hydrocarbon fields that produce low or no profits, so that they can be granted Mineral Extraction Tax (MET) relief for 2016, KazMunaiGas Exploration & Production (KMG EP), which includes Ozenmunaigas JSC, reported March 31.
The breakeven point for Ozenmunaigas JSC, as of September 30, 2015, was estimated by the KMG EP company to be approximately $65 per barrel of oil, while the futures prices per barrel of Brent oil for May were $38.85 per barrel as of March 31, 2016.
In a low oil price environment, the Kazakh government has the ability to make relief to temporarily reduce the MET on hydrocarbon fields that produce low or no profits.
The request to temporarily have MET relief for 2015 approved for the Uzen and Karamandybas fields in the country's Mangystau province has not been approved by the Kazakh government.
Had the company been awarded such a relief, a MET rate of 0.65 percent would have applied retrospectively throughout 2015 (as opposed to the current 13-percent MET rate).